Wednesday, 15 May 2019

Housing market and bank lending effects on young firms and local economies

a column by Steven Davis and John Haltiwanger for VOX: CEPR’s Policy Portal

Young firms live a financially precarious life, often dependent on self-funding tied to the value of the business owners’ homes.

This column uses data from the US to show that housing market fluctuations play a major role in driving medium-term changes in young firm employment shares. As young firms hire a disproportionate number of younger and less-educated workers, these groups are disproportionately affected by house price fluctuations.

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